Apple takes a big bite of China

PUBLISHED : Monday, 27 February, 2012, 12:00am
UPDATED : Monday, 27 February, 2012, 12:00am
 

Despite nagging issues over the iPad trademark and its production supply chain, Apple is building momentum to make its desktop and laptop computers as popular on the mainland as its much-coveted iPhone.

Analysts expect Apple's recently announced OS X Mountain Lion, the ninth major release of the firm's desktop operating system, to help fire up sales of iMac and MacBook computers on the mainland in the second half of this year.

On February 16, Apple released a so-called developer preview of its next-generation Macintosh operating system that has features specifically designed to support users in the world's biggest market for personal computers.

Mountain Lion, touted to have more than 100 new features, includes significant enhancements to the Chinese input method and the option to select Baidu as the default online search engine instead of Apple's Safari.

The operating system upgrade makes it easy to set up Contacts, Mail and Calendar functions with top mainland e-mail service providers, such as Tencent's QQ, 126.com and Netease.com's 163.

It supports Chinese microblogging service Sina Weibo. Users can also upload video, via the operating system's 'Share Sheets' feature, directly to leading mainland video websites Youku and Tudou.

'Mountain Lion, obviously, is a step in the right direction, and should help accelerate the growth of Mac products on the mainland,' said Alberto Moel, an analyst at Bernstein Research.

Data from market research firm IDC show that Apple almost doubled mainland sales of iMac and MacBook computers to 1 million last year, from about 600,000 in 2010.

Apple was ranked No 11 among the mainland's top-selling personal computer brands last year.

'Apple is within striking distance to unseat either Sony or Toshiba as one of the mainland's top-10 personal computer suppliers this year,' said Bryan Ma, IDC's associate vice-president for Asia-Pacific client devices research.

'China has Apple fever like the rest of the world,' Ma said.

'There is so much interest around Apple products, led by the iPhone and iPad, that growth was inevitably going to happen anyway for Mac computers on the mainland.'

Apple said Mountain Lion was slated for release in the summer, when the operating system upgrade is made available on the online Mac App Store.

'The Mac is on a roll, growing faster than the [Microsoft Windows-based] PC for 23 straight quarters [globally], and with Mountain Lion things get even better,' said Philip Schiller, Apple's senior vice-president of worldwide marketing.

However, both Ma and Moel said that Apple would still lag significantly behind China's market leader Lenovo and the other major computer brands on the mainland.

Lenovo, also the world's second-largest supplier of personal computers, sold about 23 million on the mainland last year, up from 19 million in 2010.

'The biggest issue with Apple products isn't quality or functionality, it is price,' Moel said.

'The average selling price of an Apple desktop or notebook is close to US$1,000, which is almost twice the average selling price for a Lenovo, HP, or Acer computer.

'The Apple Stores are excellent points of sale and for branding exercises, but greater availability of Apple products on the mainland will be determined by the depth of the company's distribution and channels,' Moel said.

IDC's Ma noted that Apple's typical buyers on the mainland were young professionals in the large metropolitan cities, not the average, price-sensitive consumers found in smaller cities and rural areas.

Apple has described China - the mainland, Hong Kong, Macau and Taiwan - as its second-largest market after the United States. Its China sales reached a record US$13 billion in its financial year ended September 24.

But business on the mainland has been far from smooth for Apple. It is now engaged in multiple lawsuits against bankrupt Taiwanese businessman Rowell Yang Long-san, Hong Kong-listed Proview International and its units over the iPad trademark.

The Proview group, which Yang founded, has claimed its Shenzhen unit owns the iPad trademark on the mainland, while the Taiwan unit has sued Apple in a US court to nullify a 2009 deal in which the unit sold its rights to that trademark in other overseas markets.

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